Bernard Jenkin: The speech by the hon. Member for Swansea West (Geraint Davies) reminded me of the cartoon in Private Eye called “Great Balls of Today”. He recited a litany of all the clichés that we expect from the Labour party. I would simply say that the Labour party’s determination to oppose the extra room subsidy paid by the housing benefit system shows that it is determined to make sure that there should be no reform of the welfare budget whatsoever. It opposes every single measure to try to restrain expenditure on welfare, which takes up over a third of Government spending. [Interruption.] I notice, Mr Deputy Speaker, that it is getting rather noisy on the Opposition Benches; I shall try not to provoke them any further.
	I rarely remember, if at all, a Chancellor rising to deliver his Budget statement against a background of such dire and low expectations about what he could achieve. I am pleased to reassure my hon. Friend the Member for Banbury (Sir Tony Baldry), who has just left the Chamber, that I am happy to commend the Chancellor’s Budget statement. He had incredibly little flexibility at his disposal, but the Budget contains a number of really imaginative measures, particularly the supply side reforms that always help to stimulate economic growth. In whatever economy they are tried, such measures prove to be effective. The reduction in corporation tax is another step in the right direction; the abolition of employers’ national insurance for small employers is a huge step in the right direction; and the limitation on capital gains tax for business is a very good step in the right direction.
	I also very much welcome the substantial implementation of the Heseltine review. The Select Committee on Public Administration, which I chair, took evidence from Lord Heseltine, who gave a very good account of many of the things that could and should be done to make the use of public money much more effective away from London, as well as championing things like swifter decisions on infrastructure, such as airport capacity. I commend the review, and I hope yet that the Government will speed up the decision about airport capacity, which is so vital for the health of London as a global city.
	My right hon. Friend’s statement also reflected an extraordinary determination to follow through and to continue what he started, and not to be diverted by
	those who somehow think it would be easier and more effective for the Government to start borrowing more money and spending more money, as though that was a painless way of reviving the economy. It is extraordinary that we have to go back to the lessons that we thought the Labour party had learnt in the 1980s—that we cannot spend our way out of trouble. It has forgotten all the lessons that made it electable under Tony Blair, and I suspect that that makes it unelectable now.
	The real question at the heart of the Budget was raised not by the Leader of the Opposition but by a number of right hon. and hon. Members, including one or two Members of Her Majesty’s official Opposition, but not from the Front Bench, and that is growth. The real question that hangs over the Budget is whether we believe the growth forecast. Hitherto, we have been disappointed, and that is because energy costs are so high; it is because of excessive banking regulation pouring out of the EU on to the City of London, which happens to be our biggest export earner and our biggest generator of tax revenue; it is because the banks are not lending because the Government have increased the capital ratios for banks when they should perhaps have been reducing them; it is because quantitative easing might make bank lending cheap for the Government, but it does not necessarily make it easier for the banks to rebuild their balances; and it is because of the burden of high taxation.
	I commend the Budget for its consistency and determination, but the question is whether the pace of economic reform that my right hon. Friend is introducing is fast enough. It may yet prove beneficial and necessary to accelerate the spending reductions, the reductions in taxation and the supply side measures, and accelerate even further the infrastructure investment that is so necessary to get the economy to grow. If we find ourselves once again set back by economic forecasts that have not been delivered, we will have to begin to ask ourselves not how we just let ourselves off the lead and start spending money that we have not got and borrowing even more money that we cannot afford to borrow, placing the burden on future generations, but how we start taking additional pain now to avoid greater agony in the future and greater agony for our children and our children’s children.
	I remind the House that it is not just that the Government inherited a very difficult situation. I commend chart 1.8 on page 21 of the Red Book. At the peak of the economic cycle in 2007, the structural deficit was more than 5%. As soon as the economy went into reverse after the crash, it quickly became apparent that the previous Government had vastly overextended themselves and had vastly increased public expenditure beyond what we could afford, so that public expenditure peaked at over 50% of GDP, the previous Government having inherited public spending at below 40% of GDP. It was that expenditure that was unfunded, even at the peak of the economic cycle, which is why we now face such a dire economic situation. I commend the Chancellor of the Exchequer for taking this as seriously as he has and setting it out to the House so truthfully. I hope that his forecasts will be delivered.